Can the Additional Period be extended by Embassy Suites By Hilton?
Embassy_Suites_By_Hilton Franchise · 2025 FDDAnswer from 2025 FDD Document
If the default is for failure to comply with physical standards or other non-monetary default which could only be cured by Lender acquiring possession of the Hotel and/or ownership of Franchisee (each, an "Acquisition"), Lender may have an additional period of one hundred eighty (180) calendar days, commencing at the expiration of Lender's Cure Period, to complete its Acquisition, through UCC sale, foreclosure or other appropriate proceedings ("Additional Period"); provided, that Lender must: (i) notify Franchisor no later than the date it commences proceedings (or promptly after action is stayed or enjoined) that Lender wants the Additional Period; (ii) commence proceedings and diligently prosecute such proceedings to completion within the Additional Period; and (iii) comply with the obligations of Franchisee under the Franchise Agreement not being performed by Franchisee during the Additional Period including payment of all monetary obligations but excluding those obligations which can only be performed by Franchisee or which Lender cannot perform without possession of the Hotel and/or ownership of Franchisee. On request by Lender, the Additional Period may be extended by Franchisor in its determination, which determination shall take into consideration the period of time required to complete an Acquisition in the applicable jurisdiction, and any period of time in which Lender's action has been stayed or enjoined.
Source: Item 23 — RECEIPTS (FDD pages 97–304)
What This Means (2025 FDD)
According to the 2025 Embassy Suites By Hilton Franchise Disclosure Document, the Additional Period, which is initially 180 days for the lender to complete the acquisition of the hotel, may be extended by Embassy Suites By Hilton.
The decision to extend the Additional Period is at Embassy Suites By Hilton's discretion. In making this determination, Embassy Suites By Hilton will consider the time needed to complete an Acquisition in the relevant jurisdiction. They will also consider any time during which the lender's actions were stayed or legally prevented.
For a prospective Embassy Suites By Hilton franchisee, this means that if the lender needs more time to take possession or ownership of the hotel due to legal or jurisdictional delays, Embassy Suites By Hilton has the flexibility to grant an extension. This can provide more security to the lender and potentially prevent a rushed or incomplete acquisition process. However, the ultimate decision rests with Embassy Suites By Hilton, and there is no guarantee that an extension will be granted.
It is important for potential franchisees to understand the conditions under which such extensions may be granted and to discuss these scenarios with Embassy Suites By Hilton during their due diligence process.